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But surely IT is a growth area? What else is a growth area if that isn't? except low paid aged care jobs. and of course certain jobs like coding being off-shored in some cases -- or the govt bringing in 457 visa workers or UTS graduates on bridging visas who are exploited by employers on the cheap. I would think proudly having a back office job at a bank might be a little more precarious...

Sure. As we know, the prime job of the RBA and APRA is to keep the banks solvent for the benefit of the bank shareholders. End of story.
As to where Aussie banks make most of their money in order to pay you miserable interest?
(Except when they divert pensioners' life savings from low risk capital guaranteed term deposits to high risk high return ventures for their own purposes by forging signatures.)

Yes, why did CJ 'turn'? From market shill to vaguely honest commentator. Qualms of conscience? Finally got a massive inheritance and didn't feel the need to hustle the public quite so much as in his go-getting years? Went to a Buddhist retreat? Any theories?

At a current cost of $5bn a year to Treasury, and potentially unlimited, with an uncomfortably large Federal deficit, even the Libs would look at reducing this haemorraghing as an easy deficit reducer. The Libs would quietly know it's inflationary to property and does little to make housing or rents 'affordable', but both sides of politics keep it on to appease various vested interests and their lobbies.

Just to point out that FRB is the fractional reserve the bank is required to hold to make a loan of any amount. The banks realised long ago that they held reserves of people's money and could lend it out in turn to others for interest to create cash flow, and that, hey, it was actually kind of inefficient to work on full reserve, i.e. if they had $100 they could lend $100 and no more. Why not lend $1,000 instead where the $1,000 doesn't have to be actual money but a kind of promissory note -- today an electronic bunch of zeros and ones! They realised that if they started writing mortgages, say, then they could use the value held in the house on a potential resale as a recoverable amount rather than having to have any cash reserve in a bank. Consequently many banks in many countries can hold ZERO reserves to offer mortgages, personal loans, and credit cards. A bunch of different countries mandate a bunch of different required reserve rates for these sort of respective banking activities supposedly based on perceived risk of defaults, generally in the range of about 0-20%. For instance, if you expected a lot of defaults on ppl who have maxed out on credit cards, and you (the bank) know if you have to go to the trouble of repossessing the new plasma TV from the person or filing for bankruptcy etc you are less likely to get all their money back than on a house with an 80% LVR or a house on a 95% LVR securitised by another house or some other easily liquified commodity, then you might want to, or be required to, have a cash reserve to handle that credit card default risk. The big problem for the banks, especially the 200 regional US banks that went bust in the GFC, was when a lot of ppl started defaulting on their mortgages all at once, and the amounts they were lent exceeded the resale value less deposit due to a massive simultaneous number of foreclosure sales and lower and lower offers to purchase.
Effectively, as Matt Taibbi or someone put it, the banks are PERMANENTLY TRADING WHILE INSOLVENT. As Tor points out, consequently there is always a chance of a bank run if every depositor wants their money back at once. Really what is happening is that a handful of ppl are depositing a relatively small amount of money with the banks, and the banks are just paying the depositors interest taken out of the massive interest revenues they're receiving on all the money they've endogenously invented on the mortgages (or other loans they're operating). They don't even really need the depositors for anything any more, except to provide the convenience of a 'safe' place to store their money and have their pay paid into and go to an ATM and pay via EFT. They're just selling a raft of money transferring services for your convenience -- which is why they only pay 0.01% interest on at-call savings these days. They need SOME real money perhaps to lend against other ventures and as kind of seed capital to protect against bank runs, i.e. depositors' reserves, hence they pay better interest on term deposits. Further, there are increasing requirements from Basel II and Basel III for higher capital reserves -- although it's hard to see what difference that makes, except a safety margin when a bank run occurs due to complete lack of public confidence in a bank or banks.
The really grim stuff is in the first half of that 'Four Horsemen' video from Sept 2013 -- the point they make is that A COMBINATION of abolishing a gold standard limiting how much money you can create in a national economy COMBINED WITH fractional reserve banking allows asset bubbles like the housing bubble to occur -- as the banks become endogenous money creators -- this addresses the OP on this thread who claims it is not the Federal Reserve creating new money supply -- they are right, it is the banks themselves every time they revalue housing and write more bloated mortgages for money and value that doesn't actually exist yet -- the value is simply a 'promise' by the borrower to repay sometime in the future which they hope they can keep on an estimate of their earnings. We saw in the case of the US subprime meltdown with no-docs and low-docs loans to ppl without solid incomes how well that worked. We see a sort of positive feedback loop occurring between the banks creating money and housing prices until either ppl start going broke or you reach the limits of what everyone can collectively pay. In Oz, they are now topping it up with $5bn per year of neg gearing money from Treasury, for instance. Then the spruikers and marketeers start looking for SMSF money, having exhausted all other sources of capital. All these inputs keep the bubble growing until it bursts or at least reaches a massive and economically uncomfortable size.
Every economy has to have a mechanism for slowly increasing the 'total amount of money' available in its national borders solely due to population increase and possibly any lucky technological IP breakthroughs and similar things that might for instance improve the balance of payments and exports with other countries who suddenly want your stuff -- but it is totally the wrong way to go about it by allowing the banks to write ever larger mortgages and misallocate ever larger amounts of this massive money creation machine to a housing asset bubble. Effectively the banks are the printing press.

Everyone seen The Four Horsemen? Sept 2013.
Free viewing in its entirety:
It seems to explain a lot of what we're seeing.
FOUR HORSEMEN is an award winning independent feature documentary which lifts the lid on how the world really works. As we will never return to 'business as usual' 23 international thinkers, government advisors and Wall Street money-men break their silence and explain how to establish a moral and just society. FOUR HORSEMEN is free from mainstream media propaganda -- the film doesn't bash bankers, criticise politicians or get involved in conspiracy theories. It ignites the debate about how to usher a new economic paradigm into the world which would dramatically improve the quality of life for billions. "It's Inside Job with bells on, and a frequently compelling thesis thanks to Ashcroft's crack team of talking heads -- economists, whistleblowers and Noam Chomsky, all talking with candour and clarity." - Total Film "Four Horsemen is a breathtakingly composed jeremiad against the folly of Neo-classical economics and the threats it represents to all we should hold dear." - Harold Crooks, The Corporation (Co-Director) Surviving Progress (Co-Director/Co-Writer) Follow us on https://www.twitter.com/RenegadeEcon on https://www.facebook.com/RenEconomist or visit our website http://www.renegadeeconomist.com Support us by subscribing here http://bit.ly/1db4xVQ Also you can check our shop at http://www.renegadeeconomist.com/info...

Then there were weird quotes from Harry Triguboff in News Ltd in 2011 attributing 75% of his new apartment sales in Sydney to Chinese buyers:
So who are we to believe? Given that the (detailed?) FIRB figures are apparently confidential and not released to the public.

S'funny, in the US, that bastion of capitalism, banks offer the full period of a mortgage at a fixed interest rate, e.g. 4% for 25 years. Why should the borrower have to prove they're 'future proof' against arbitrary interest rate rises, where they are absorbing all the risk and uncertainty rather than the lender? How do you know what job you will be doing in 10 years and at what pay scale? What about all those employees at Toyota, Ford, Holden, Mitsubishi, Alcoa and all the ancillary industries?
These Aussie banksters should be lined up and shot, along with the RBA and the APRA. Their very language is intended to demonise borrowers and make themselves seem virtuous.

I'm beginning to think the RBA never cried wolf, that's the problem. Never regulated the bubble. Nor did APRA. The RBA's principal function is to keep the banks solvent, so I suppose they think they've achieved their mission.
I've noticed the RBA economists were publishing very good papers on credit, debt and housing cycles during 1999-2001, examining the 1890s and 1930s depressions. Then it goes silent from then onwards, likely because they realised our current market resembles those periods back then. Then the RBA goes into full-bubble denier mode, can't get a word out of Kent, Fisher, Lowe, etc. Ellis is one of the worst, given that in 2006, she wrote that the increase in US housing prices and household debt was a welcome development! This comes from the head of the RBA's Financial Stability department! That mortgage arrears hasn't risen significantly is perfectly normal, because it is only after the housing market peaks and then crashes do loans begin to sour en masse.
There is a real lack of independent analysis out there, with the possible exception of the Macro Business Super Blog.

CJ seems to have turned from perennial spruiking, spinning market bull into someone quite realistic these days. His EFMs however require large capital gains to be attractive to the market, so he is not even really spruiking for those -- his EFMs would lose money in a downwards correction. A responsible economist (CJ got high marks at USyd at least) might be tempted to compare Australia's bubble with the Japanese bubble, or the US just before the GFC, etc, and draw similar conclusions as to the outcome.

A Senate Enquiry was started in Dec 2013 on affordable housing. Submissions from anyone closed on 25 March. There seems to be one of these enquiries every few years, and nothing seems to change out there -- or only gets worse.
There are now 141 submissions put up on the Enquiry website. Ranging from serious academics in housing to municipal councils and NRAS providers, along with submissions from Joye/Rismark on EFMs (still flogging that horse to get rich quick), the REIA, a few other vested interests, and various individuals including Saul Eslake.
Many of the submissions criticise negative gearing, the NRAS comes in for a panning, etc.
The submissions are well worth a browse.
Terms of reference are at: http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Affordable_housing_2013/Terms_of_Reference
Submissions are at: http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Affordable_housing_2013/Submissions